The bankruptcy process can be intimidating, especially if you aren’t well informed about how it works. Before filing for bankruptcy it is important to educate yourself to the basics and what they could mean for you.
First, the bankruptcy process isn’t for everyone. While many people assume that you have to be either poor, or in jeopardy of losing your luxury assets, the fact is that how bankruptcy can benefit you is dependent on your unique financial situation. You may have adequate income, but be at risk of foreclosure; or you may be financially insolvent and risk not being able to meet the needs of your family. Both situations, and a spectrum of those in between, could be a cause to seek bankruptcy protection. The most important step here is to seek counsel from a qualified bankruptcy lawyer.
Also, the bankruptcy process can play out in two very different ways for your financial situation. If you seek Chapter 7, you may risk losing some of your nonessential assets to satisfy the debts. However, there is no guarantee that any of your assets will be at risk or whether you will be qualified for a Chapter 7 filing. In a Chapter 13 filing, you will be required to repay at least a portion of your debts to some creditors. This is generally spread out over a series of up to five years, making the payments low enough to work within your budget.
Last, not all debts are eligible for bankruptcy. If you are considering filing due to tax debts, student loans or domestic support payments, you could find that these debts are not eligible to be discharged. In some situations, even eligible debts could face challenges in obtaining a discharge. The sensitive nature of your debts, how they will be managed and which type of filing you should seek is best left to the hands of your Dallas bankruptcy lawyer. It is generally not advised to seek bankruptcy without the guidance of a trained professional.